SatMex boosts Eutelsat’s numbers

By Chris Forrester

May 16, 2014

Just before the end of last year, Paris-based Eutelsat wrapped the purchase of the SatMex portfolio of satellite assets, and the deal is now beginning to make real sense. Video business at the end of Q3 (to March 31st) grew 1.5 per cent with SatMex’s help, but Data & Value Added business mushroomed 22.7 per cent, and Multi-Usage revenues saw a valuable 13.7 percent growth.

However, despite this well-received news the operator is still suffering the loss of US governmental and military business both from the wind-down of operation in the Middle East and the US government cut-backs. Also not helping was the cessation of some key frequencies from the formerly disputed orbital slot (with SES Astra) at 28.5° East, as well as three launch delays. Nevertheless, the acquisition of SatMex is dramatically helping future growth with the division’s backlog growing 82 per cent over the past 12 months and a positive indication that now that SatMex is in safer hands the business is benefiting.

Overall, Q3 revenues rose 1.5 per cent (2.5 per cent at constant FX and excluding SatMex). Add in SatMex and revenues grew 6 per cent y-o-y. The operator’s all-important backlog of contracts grew to €5.8 billion (up 1.3 per cent from €5.5 billion y-o-y, and again including SatMex), and encouraging CEO Michel de Rosen to praise the “strong growth potential from Latin America, and [the region] being one of the most dynamic markets for satellite services. SatMex is now called Eutelsat Americas.

“In the third quarter, Video Applications revenues reflected the impact of the suspension of operations on certain frequencies at 28.5 degrees East and the lack of available capacity at other key video neighbourhoods. The successful launch of the Express-AT1 and Express-AT2 satellites marks an important stage in our deployment plan that will add capacity in video markets in the fastest growing regions. The environment for Data services remains generally tough although Satmex has brought a new dynamic. Value-Added Services posted a further strong performance. In Multi-usage, third quarter 2013-2014 contract renewals were in the lower end of our expectations,” added De Rosen.

Eutelsat is now operating 977 transponders (up from 855 as at December 31st) with a fill rate of 77 percent (compared with 74.8 per cent at December 31st). Eutelsat says its new American division will add around $ 70 million to its revenues this year.

However, Eutelsat pulled no punches saying there was too much capacity over Africa and this impacted prices, and certain contracts across the fleet have also suffered from highly competitive pricing.